Indian state of Gujarat may cut solar feed-in tariff

Gujarat's utility company is recommending a reduction in the tariff rate it pays for solar power from the current price of US$0.21 a kilowatt hour to about US$0.15.

Since 2010, Gujarat's state-owned utility has signed 88 contracts for a total of 971.5 MW of solar capacity.

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In India's Gujarat state, solar plant owners may be getting too much of a good thing.

The local utility company in the state, a solar power hub that is home to about 50% of the country’s solar capacity, is looking to reduce tariff rates for projects, citing the excessive profits earned by solar plant owners.

State-run utility Gujarat Urja Vikas Nigam Ltd. (GUVNL), which buys solar power, has submitted a petition to government regulators to cut the rates due to the "unjustified and windfall gains" by plant owners, according to Bloomberg News.

GUVNL proposes lowering the feed-in tariff from the current average price of INR 12.54 ($0.21) a kilowatt hour over 25 years to about INR 9 ($0.15), which it described as "reasonable and prudent tariff."

Since 2010, GUVNL has signed 88 contracts for a total of 971.5 MW of solar capacity with developers, among them Adani Enterprises, Moser Baer India, Tata Power and Welspun Energy, Bloomsberg reported.

Regulators are scheduled to hold the first hearing on the petition on July 23.